Lockdowns to impede recovery in H1

MANILA, Philippines — The reimposition of stricter mobility restrictions in the National Capital Region and adjacent provinces or NCR Plus amid the resurgence of COVID-19 infections is seen dragging the economy in the first half of the year, according to the Bangko Sentral ng Pilipinas.

BSP Governor Benjamin Diokno said during a virtual press briefing that the decision to place the NCR Plus under enhanced community quarantine from March 29 to April 11 and under modified enhanced community quarantine from April 12 to 30 could impede recovery.

“These mobility restrictions are likely to exert an impact on the country’s economic performance in the first half of the year,” he said.

Diokno said the stricter mobility restrictions could shave off 0.5-percentage-point from the 6.5 to 7.5 percent gross domestic product (GDP) growth target penned by the Development Budget Coordination Committee (DBCC).

He said the global economy continues to gain traction as vaccines become increasingly accessible, with various indicators of domestic demand and sentiment showing improvement during the quarter, especially among major economies.

“However, the resurgence of COVID-19 cases and the apparent inequitable distribution of vaccines have also continued to weigh on prospects of a swift global recovery,” Diokno said.

Aside from the Philippines, the BSP chief said a fresh wave of virus outbreaks across many countries, particularly in Europe and Asia, has prompted governments to reimpose containment measures that could impede economic recovery.

Diokno said inflation averaged 4.5 percent in the first quarter, exceeding the BSP’s two to four percent target, despite easing to 4.5 percent in March from 4.7 percent in February due to supply-side shocks including rising oil prices as well as higher meat prices due to weather-related disturbances and the African swine fever (ASF) outbreak.